Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Partner

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Of Counsel

Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Lawrence W. Gallick

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

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Experts anticipate that the incoming Biden administration will be tough on tech. What does that mean for the future of §230 of the Communications Decency Act? The antitrust suit against Google? <a href="https://www.npr.org/2020/11/09/931039648/how-will-tech-policy-change-in-the-biden-white-house-heres-what-you-need-to-know" target="_blank" rel="noopener noreferrer">This NPR piece</a> makes some predictions.Human rights activists are outraged over a <a href="https://www.marketwatch.com/story/protests-erupt-in-france-over-bill-that-would-restrict-filming-and-publishing-images-of-police-officers-01606766693" target="_blank" rel="noopener noreferrer">proposed law in France</a> that would makes it illegal to publish images of police officers with intent to cause them harm. Supporters of the law, which was passed partly in response to demands from police unions, argue that it doesn’t ban people from filming police in action, but rather, just from using the images to cause them physical or psychological injury.<a href="https://www.brecorder.com/news/40048358" target="_blank" rel="noopener noreferrer">Regulations in Pakistan</a> expand the power of the Pakistan Telecommunication Authority (PTA) by allowing the agency to require social media platforms with more than half a million users in the country to register with the PTA and establish a permanent office and database servers in Pakistan.We’ve discussed the U.S. Federal Trade Commission’s <a href="https://www.sociallyawareblog.com/2020/03/03/fake-news-paid-reviews/" target="_blank" rel="noopener noreferrer">Use of Endorsements and Testimonials in Advertising</a> on Socially Aware. Here are some tips on how to comply with the <a href="https://www.natlawreview.com/article/ftc-lawyer-uk-endorsement-guide-compliance" target="_blank" rel="noopener noreferrer">UK’s guidelines for social media influencers</a>.Trying to use social media to convince people that COVID-19 vaccinations are the way to end the pandemic? Think again. <a href="https://www.axios.com/social-media-covid-vaccine-poll-b49a343c-cd5e-4eb0-81d9-1ad7c37ff899.html" target="_blank" rel="noopener noreferrer">Harris Poll endorsements</a> show that “more than half of Americans say they have little or no trust in social media when it comes to information on the COVID-19 vaccine.”

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions.











Anthony Ramirez

Social Links: Internet law under Biden; new tech-laws around the world; the UK’s Endorsement Guides

Experts anticipate that the incoming Biden administration will be tough on tech. What does that mean for the future of §230 of the Communications Decency Act? T

Social Links: Internet law under Biden; new tech-laws around the world; the UK’s Endorsement Guides

The Federal Trade Commission (FTC) appears to be using its ongoing <a href="https://www.ftc.gov/enforcement/rules/retrospective-review-ftc-rules-guides" target="_blank" rel="noopener noreferrer">review of current rules and guides</a> to revisit its approach to driving home the message that the relationship between a social media “influencer” and the brand he or she is endorsing must be disclosed. As we have <a href="https://www.mofo.com/resources/insights/191119-guidance-online-endorsers.html">described previously</a>, the FTC has interpreted its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “<a href="https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-publishes-final-guides-governing-endorsements-testimonials/091005revisedendorsementguides.pdf" target="_blank" rel="noopener noreferrer">Endorsement Guides</a>”) to require that online advertisements — like all other advertising — clearly and conspicuously disclose material connections between endorsers (i.e., influencers) and the brands they promote because such connections may affect the credibility of the endorsement. And, <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt4ee798a78572856b/6273192fb5ad5f2863c596ac/180222-ftcs-quest-influencer.pdf" target="_blank" rel="noopener noreferrer">in recent years</a>, the FTC has — through enforcement actions, press releases, guidance, closing letters, and letters sent directly to endorsers (including prominent public figures) — made clear its belief that: (1) appropriate disclosures by influencers are essential to protecting consumers; and (2) in too many instances, such disclosures are absent from celebrity or other influencer endorsements.Now, in connection with a <a href="https://www.federalregister.gov/documents/2020/02/21/2020-03447/guides-concerning-the-use-of-endorsements-and-testimonials-in-advertising" target="_blank" rel="noopener noreferrer">request for comments</a> on the Endorsement Guides, FTC Commissioner Rohit Chopra has issued a <a href="https://www.ftc.gov/system/files/documents/public_statements/1566445/p204500_-_endorsement_guides_reg_review_-_chopra_stmt.pdf" target="_blank" rel="noopener noreferrer">scathing statement</a> calling on the FTC to “take bold steps to safeguard our digital economy from lies, distortions, and disinformation.” In this regard, Commissioner Chopra suggests that the FTC’s efforts to date have not been effective in “deterring misconduct in the marketplace” relating to inauthentic and fake reviews, and that, in particular, elements of the Endorsement Guides should be codified as formal rules so that violators can be liable for civil penalties and damages under the FTC Act.Also of note is that Commissioner Chopra has asserted that the FTC should refocus its efforts on advertisers themselves, and not the influencers that promote their brands.  According to the Commissioner, “when companies launder advertising by paying someone for a seemingly authentic endorsement or review, this is illegal payola,” and “companies paying for undisclosed influencer endorsements and reviews are not [being] held fully accountable for this illegal activity.” Seeking to aggressively penalize advertisers themselves would be a shift in emphasis for the FTC, as its recent efforts to combat inadequate disclosures in influencer advertising have focused on influencers. For example, the FTC recently produced a <a href="https://www.ftc.gov/news-events/press-releases/2019/11/ftc-releases-advertising-disclosures-guidance-online-influencers?utm_source=govdelivery" target="_blank" rel="noopener noreferrer">brochure</a> detailing the responsibility of influencers “to make [required] disclosures, to be familiar with the Endorsement Guides, and to comply with laws against deceptive ads.” The FTC also brought an enforcement action against influencers, and foreshadowed that more enforcement will happen in the future.Comments on the Endorsement Guides are due April 21, 2020. In the federal register notice, the FTC outlines ten questions, summarized below, that are of particular interest. In addressing these questions, commenters should also consider whether to respond to the concerns raised by Commissioner Chopra regarding how to ensure that material connections between advertisers and endorsers are appropriately disclosed, including whether a ratcheting up of FTC enforcement powers is warranted.1. Are the practices addressed by the Guides prevalent in the marketplace and are the Guides are effective when addressing those practices?2. Are consumers benefiting from the Guides and what impact, if any, are the Guides having on the flow of truthful information to consumers?3. Are changes in technology or the economy requiring changes in the Guides?4. Should guidance in “<a href="https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking" target="_blank" rel="noopener noreferrer">The FTC’s Enforcement Guides: What People Are Asking</a>” be incorporated into the Guides?5. How well are advertisers and endorsers disclosing unexpected material connections in social media?6. Are children capable of understanding disclosures of material connections and how those disclosures might affect them?7. Do incentives like free or discounted products bias consumer reviews, even when a favorable review is not required to receive the incentive, and how should those incentives be disclosed?8. Are composite ratings that include reviews based on incentives misleading even when reviewers disclose incentives in the underlying reviews?9. Should the Guides address the use of affiliate links by endorsers?10. What, if any, disclosures do advertisers or operators of review sites need to make about the collection, processing, and publication of reviews to prevent them from being deceptive or unfair?Material changes in the Endorsement Guides and the FTC’s approach to combatting deceptive advertising involving influencers could have a significant effect on all participants in the digital advertising ecosystem. Accordingly, all ad agencies, advertisers, and endorsers should consider a review of the Endorsement Guides compared with their own approaches to compliance, as well as whether to weigh in on the FTC’s request for comments.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

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Fake News & Paid Reviews: FTC Seeks Comments on its Endorsement Guides

Fake News & Paid Reviews: FTC Seeks Comments on its Endorsement Guides

The Federal Trade Commission (FTC) appears to be using its ongoing review of current rules and guides to revisit its approach to driving home the message that t

In the last few years, as advertising has followed consumers from legacy media such as television to online video and social media platforms, the <a href="https://www.law360.com/agencies/federal-trade-commission" target="_blank" rel="noopener">Federal Trade Commission</a> has been attempting to ensure that participants in this new advertising ecosystem understand the importance of complying with the FTC’s “<a href="https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-publishes-final-guides-governing-endorsements-testimonials/091005revisedendorsementguides.pdf" target="_blank" rel="noopener">Guides Concerning the Use of Endorsements and Testimonials in Advertising</a>,” or the endorsement guides. The endorsement guides require advertisers and endorsers (also referred to as influencers) to, among other things, clearly and conspicuously disclose when the advertiser has provided an endorser with any type of compensation in exchange for an endorsement.A failure to make appropriate disclosures may be a violation of <a href="https://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf" target="_blank" rel="noopener">Section 5 of the Federal Trade Commission Act</a>, which prohibits unfair or deceptive acts or practices. In recent enforcement actions, press releases, guidance, closing letters and letters sent directly to endorsers (including prominent public figures), the FTC has made clear its belief that: (1) appropriate disclosures by influencers are essential to protecting consumers; and (2) in too many instances, such disclosures are absent from celebrity or other influencer endorsements.Given the repetition of this message, it is apparent that the FTC believes it is still not being heard. With influencer marketing campaigns showing no signs of losing popularity, it would not be surprising if the next step the FTC takes is to bring an enforcement action against a major celebrity, as well as the brand or brands with which the celebrity is associated. So, with the FTC on the prowl, brands, advertisers and marketing companies should all be making sure they have a compliance program in place to increase the likelihood that the FTC makes its splash elsewhere. In this post, we recount how the FTC has gotten to where it is today and, thus, why it might be heading for a celebrity enforcement action next.In the BeginningThe FTC’s activity in the endorsement and influencer space is grounded in its endorsement guides, which outline how the FTC believes a business may lawfully use consumer and other endorsements in its advertising. The endorsement guides provide, in relevant part, that any “material connection” between an endorser and an advertiser—in other words, a connection that might affect the weight or credibility that consumers give the endorsement—must be clearly and conspicuously disclosed. The FTC’s thinking is typified by this example from its endorsement guide FAQs:Say you’re planning a vacation. You do some research and find a glowing review on someone’s blog that a particular resort is the most luxurious place he has ever stayed. If you knew the hotel had paid the blogger hundreds of dollars to say great things about it or that the blogger had stayed there for several days for free, it could affect how much weight you’d give the blogger’s endorsement. The blogger should, therefore, let his readers know about that relationship.The scope of a material connection, as stated in the endorsement guides and as interpreted by the FTC, including in the FAQs, is quite broad. It includes, for example, a business relationship, a payment, a gift or a sweepstakes entry. The scope of actors subject to the rules is also quite broad: it includes advertising and marketing companies that facilitate campaigns on behalf of advertisers (i.e., brands), those advertisers/brands themselves, and the endorsers or influencers acting on behalf of the marketing companies or brands. As discussed below, the FTC’s enforcement actions have involved each of these types of participants in influencer marketing activities.First, the Marketing FirmsThe FTC’s efforts to regulate this ecosystem began in late 2014 when the FTC brought its first enforcement action specifically related to social media activity (though this case also included straightforward allegations of deceptively made statements). The FTC alleged that the advertising firm Deutsch LA Inc. engaged in deceptive activities relating to the promotion, through <a href="https://www.law360.com/companies/twitter-inc" target="_blank" rel="noopener">Twitter</a>, on behalf of its client Sony, of the PlayStation Vita handheld gaming console.In a story that would become familiar over the next few years, the <a href="https://www.ftc.gov/system/files/documents/cases/1503deutschcmpt.pdf" target="_blank" rel="noopener">FTC’s complaint</a> alleged that company employees responded to a request from an assistant account executive at the company to use their personal Twitter accounts to post positive comments about the Sony console, each using the “#gamechanger” hashtag. The complaint includes examples of the employees’ tweets, such as, “One thing can be said about PlayStation Vita…it’s a #gamechanger.” The FTC alleged that the employees’ tweets were deceptive because they falsely purported to be endorsements from actual users of the Sony gaming console. Moreover, the fact that the tweets were written by employees of Sony’s ad agency would have been material to consumers in making decisions about whether to purchase the console. For this reason, the tweeters’ failure to disclose their connection to Deutsch LA (and, in turn, to Sony) was allegedly deceptive.In September 2015, the FTC brought a very similar case against Machinima Inc., an online entertainment network. Machinima allegedly paid video bloggers to promote the <a href="https://www.law360.com/companies/microsoft-corporation" target="_blank" rel="noopener">Microsoft Xbox One</a> system by producing and uploading to <a href="https://www.law360.com/companies/youtube-inc">YouTube</a> videos of themselves playing Xbox One games. The FTC alleged that Machinima did not require any disclosure of the compensation the influencers received and that many videos lacked any such disclosure. Because the payments would not be reasonably expected by YouTube viewers, the failure to disclose them was deceptive in violation of Section 5.Then, the BrandsIn connection with the Machinima matter, the <a href="https://www.ftc.gov/system/files/documents/closing_letters/nid/150902machinima_letter.pdf" target="_blank" rel="noopener">FTC also issued a closing letter</a> reflecting that it had also investigated Microsoft and its advertising agency Starcom in relation to the influencers’ videos. (Starcom managed the relationship with Machinima.) Even though the FTC did not ultimately take action against Microsoft (or Starcom), the closing letter made clear the FTC’s position that a company whose products are promoted bears responsibility for the actions of its ad agencies — as well as the actions of those engaged by its ad agencies. In particular, Microsoft avoided an enforcement action because it had a “robust” compliance program in place that included specific guidance relating to the FTC’s endorsement guides and because Microsoft made training relating to the endorsement guides available to employees, vendors and personnel at Starcom. (The FTC also subsequently updated its endorsement guides FAQs to formalize the expectations that were foreshadowed in the closing letter, including the statement that “[a]dvertisers need to have reasonable programs in place to train and monitor members of their network.”)Consistent with its incremental approach, the FTC followed these actions with its first complaint against a brand for its use of social media influencers. In early 2016, the FTC alleged that <a href="https://www.law360.com/companies/lord-taylor-llc" target="_blank" rel="noopener">Lord & Taylor</a> gifted a dress to 50 “fashion influencers” and paid them to post photos of themselves wearing the dress on their <a href="https://www.law360.com/companies/instagram-inc" target="_blank" rel="noopener">Instagram</a> accounts. According to the FTC, Lord & Taylor’s role in the promotional effort was not appropriately disclosed. The FTC thus alleged that the company violated Section 5’s prohibition on deceptive practices by, among other things, failing to disclose that the influencers’ Instagram posts did not reflect their independent and impartial statements, but rather were specifically created as part of an advertising campaign in which they were paid to participate.The FTC followed the Lord & Taylor action with <a href="https://www.ftc.gov/news-events/press-releases/2016/07/warner-bros-settles-ftc-charges-it-failed-adequately-disclose-it" target="_blank" rel="noopener">a similar settlement</a> relating to a company’s alleged failure to disclose that it had paid online influencers to post positive reviews in YouTube videos and on social media. Here, while the company allegedly instructed influencers to provide a written disclosure that videos were sponsored, they did not “require that the YouTube influencers be instructed to place a sponsorship disclosure clearly and conspicuously in the video itself.”Taken together, these actions show how the FTC has moved incrementally, starting with matters involving standard-fare alleged deceptive practices by marketing companies that also involved social media endorsements, and then escalating to enforcement actions against brands based on specific failures to include disclosures in a specific manner.To Individual Endorsers (Sort Of)Having covered two of the major parts of the social media advertising ecosystem, the logical next step for the FTC is individuals who are paid to make endorsements. Here, as with previous actions, the FTC has started (relatively) conservatively with an enforcement action announced in September 2017 against a company—and two of its officers—in connection with endorsements made by the officers in YouTube videos and social media. The company, CSGO Lotto Inc., runs an online virtual currency gambling website. The <a href="https://www.ftc.gov/system/files/documents/cases/1623184_csgolotto_complaint.pdf">FTC alleged</a> that the company provided two individuals (who were also owners and officers of the company) with free virtual currency to gamble on the site and that the two did not disclose their material connections to the company when they promoted it online. For example, both of the individuals created YouTube videos promoting CSGO Lotto and disseminated tweets linking to their videos and directly promoting the site (e.g., “Bruh … I’ve won like $8,000 worth of CS:GO Skins today on @CSGOLotto I cannot even believe it!”).The FTC’s allegations in this case are similar to those of the previous influencer cases, such as that the company failed to include appropriate disclosures of sponsorship in YouTube videos. But, the FTC also alleged that the officers of the company—who were named individually in the complaint — engaged in violation of Section 5 as influencers by, among other things, failing to disclose that they were owners/officers of the company, which “would be material to consumers in their decisions regarding using CSGO Lotto.”What’s Next?The CSGO Lotto case sets the stage for an enforcement action against an influencer alone. Perhaps to drive home the point, the FTC accompanied its announcement of its settlement of that case with<a href="https://www.ftc.gov/news-events/blogs/business-blog/2017/09/three-ftc-actions-interest-influencers" target="_blank" rel="noopener"> the disclosure that it had sent follow-up letters to 21 influencers</a> who, in April 2017, had received letters from the FTC regarding brand endorsements. The FTC noted that it asked the recipients to tell the FTC whether “they have material connections to the brands” in social media posts the FTC flagged and, if so, “to spell out the steps they will be taking to make sure they clearly disclose their material connections to brands and businesses.”Given the FTC’s activity in this space, the parameters for running an influencer campaign that complies with Section 5 are becoming well established. To help mitigate the risk of being the FTC’s next example, some practical considerations include:<ul><li>Implementation of a process for obtaining signed and dated acknowledgements of disclosure and related obligations from each influencer with a material connection (which may include, for example, a paid relationship, a professional relationship, or free goods or services);</li><li>An explicit requirement that the endorser make clear and prominent disclosures of the material connections between the endorser and the advertiser;</li><li>A process for monitoring and reviewing social media influencers for compliance; and</li><li>Maintaining the right to immediately terminate the arrangement in light of noncompliance.</li></ul>Influencers should also understand that they must clearly and conspicuously disclose their affiliations with the brands that they promote, above the jump in the post or video. And all companies that use social media influencers should consider the policies and procedures they have in place or need to develop to ensure that they, their influencers and any other parties they work with in this space are meeting the FTC’s expectations. If they don’t, they risk falling victim to the FTC’s next efforts to promote itself as the top cop on the endorsement beat.*    *    *Editor’s note: This piece originally appeared in <a href="https://www.law360.com/articles/1014039/the-ftc-s-quest-for-better-influencer-disclosures">Law360</a>.

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The FTC’s Quest for Better Influencer Disclosures

The FTC’s Quest for Better Influencer Disclosures

In the last few years, as advertising has followed consumers from legacy media such as television to online video and social media platforms, the Federal Trade 

As Socially Aware readers know, social media is transforming the way companies interact with consumers. Learn how to make the most of these online opportunities while minimizing your company’s legal risks at Practising Law Institute’s (PLI) 2018 Social Media conference, to be held in San Francisco on Thursday, February 1st, and in New York City on Wednesday, February 14th; both events will be webcasted. The conference will be chaired by Socially Aware co-editor John Delaney, and our other co-editor, <a href="https://www.mofo.com/people/aaron-rubin.html" target="_blank" rel="noopener">Aaron Rubin</a>, will also be presenting at the event.Topics to be addressed will include:<ul><li>The new business opportunities—and legal risks—that social media is providing for businesses</li><li>What every company should know about online contractual eco-systems</li><li>How to avoid running afoul of the law when employing social media influencers and using marketing tools like user-generated content, hashtags and native advertising online</li><li>The privacy-related developments that have arisen in connection with geo-location tracking and interest-based advertising</li><li>How to minimize the risks that accompany social media use in the workplace</li></ul>In addition, an in-house panel will provide creative solutions to real-world social-media-related issues and address emerging social media trends. Don’t miss this opportunity to get up-to-date information on the fast-breaking developments in the critical area of social media so that you can most effectively meet the needs of your clients.For more information or to register, please visit PLI’s website <a href="https://www.pli.edu/Content/Seminar/Social_Media_2018_Addressing_Corporate_Risks/_/N-4kZ1z101bc?Ns=sort_date%7c0&ID=320221" target="_blank" rel="noopener">here</a>. We hope to see you there!

Social Media 2018: Addressing Corporate Risks

As Socially Aware readers know, social media is transforming the way companies interact with consumers. Learn how to make the most of these online opportunities

Social Media 2018: Addressing Corporate Risks

Instagram is now allowing a limited number of users to <a href="https://www.wired.com/story/instagram-sponsored-posts/?utm_content=buffer872d2&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer" target="_blank" rel="noopener">identify branded content with a “paid partnership” subhead</a> instead of using hashtags like #ad and #sponsored to identify sponsored posts. The platform says it plans to police paid sponsors’ <a href="http://www.sociallyawareblog.com/2015/12/21/influencer-marketing-tips-for-a-successful-and-legal-advertising-campaign/" target="_blank" rel="noopener">disclosure obligations</a> eventually, but—for now—educating and gathering feedback from Instagram’s community and launch partners is all Instagram hopes to achieve with the branded content tool.Authorities in Helsinki plan to debut in the autumn what will be the world’s first regular driverless transportation system to reach the masses: <a href="https://www.curbed.com/2017/6/15/15810912/driverless-self-driving-bus-finland-helsinki-transportation" target="_blank" rel="noopener">public, autonomous-bus services</a>. Will the job of “bus driver” one day join the list (along with “silent movie piano accompanist,” “elevator operator” and “switchboard operator”) of <a href="http://www.sociallyawareblog.com/2017/01/25/tech-not-trade-threatens-american-jobs/" target="_blank" rel="noopener">occupations rendered obsolete by new technologies</a>?On free speech grounds, a German parliamentary body <a href="https://www.reuters.com/article/us-germany-socialmedia-hatecrime-idUSKBN195227" target="_blank" rel="noopener">struck down a draft German law</a> that would have imposed up to 50 million euros in fines on social media companies that failed to remove or block racist and fake news posts within 24 hours or seven days, depending on whether the content’s racist or false nature is unambiguous.To ensure President Trump’s tweets from the official @POTUS account and his personal account are preserved for future reference, <a href="https://quigley.house.gov/media-center/press-releases/quigley-introduces-covfefe-act" target="_blank" rel="noopener">Rep. Mike Quigley has introduced the COVFEFE Act</a>, which would amend the President Records Act to include social media posts—a change that would ensure the President’s deleted tweets are documented for archival purposes and would make deleting tweets a violation of the Presidential Records Act subject to disciplinary action.In a <a href="https://newsroom.fb.com/news/2017/06/hard-questions/" target="_blank" rel="noopener">post</a> on its “newsroom” page, <a href="https://techcrunch.com/2017/06/15/facebook-censorship-terrorism/" target="_blank" rel="noopener">Facebook published a list of seven “Hard Questions”</a>—inquiries that address many of the most pressing issues today’s social media companies face, from the definition of “fake news,” to the <a href="http://www.sociallyawareblog.com/2015/03/10/who-will-update-my-status-when-im-dead-the-biggest-social-media-platforms-policies-on-deceased-user-accounts/" target="_blank" rel="noopener">fate of deceased users’ accounts</a>. The post instructs readers to weigh in by emailing Facebook at <a href="mailto:hardquestions@fb.com" target="_blank" rel="noopener">hardquestions@fb.com</a>.Hoping to expand its user base, <a href="https://techcrunch.com/2017/06/15/twitter-tweaks-its-design-again-in-an-attempt-to-woo-newcomers/" target="_blank" rel="noopener">Twitter made design changes</a> to its app again.Examining one of the many ways Internet of Things devices pose security risks, Ars Technica describes a security consultant’s demonstration of how, using terrestrial radio signals, <a href="https://arstechnica.co.uk/security/2017/04/smart-tv-hack-embeds-attack-code-into-broadcast-signal-no-access-required/?mkt_tok=eyJpIjoiTWpBd05qVTBNVEE0TTJZdyIsInQiOiI3MTEyRDJOcFQ2dVNTbGplVUswbjZVbnNjTUwybVwvcVwvZzJWa0huMjBiWXN5Z2t0MytjMSszXC83TmxCcUJtaFdseGxMdVhDcDZjZm5KNkQ1bUMwZnhDOE4wSDVFeURBenFWQ0doWVgwVkFNek0ycWo2ZFwvczdBQm1paE5MYzVmcUYifQ%3D%3D" target="_blank" rel="noopener">hackers can control a slew of Smart TVs</a>, spying on the TVs’ owners using the TVs’ cameras and microphones and attacking other devices in the TVs’ owners’ home networks.Despite the impact social media marketing can have on brand reputation, <a href="https://contently.com/strategist/2017/06/12/ceos-use-social-media/" target="_blank" rel="noopener">60% of Fortune 500 CEOs reportedly have no social media presence</a> at all.<a href="http://marketingland.com/guide-snapchat-advertising-self-serve-tool-officially-opens-216632" target="_blank" rel="noopener">Marketing Land</a> and <a href="http://www.businessinsider.com/snapchat-ad-manager-how-it-works-screenshots-2017-6/#you-can-select-from-a-list-of-objective-based-campaigns-like-app-install-or-brand-awareness-3" target="_blank" rel="noopener">Business Insider</a> published pieces describing how to use Snapchat’s new self-serve ad-buying tool, Ad Manager, the messaging app’s attempt to make advertising on Snapchat simpler and more accessible to small businesses.Inc. Magazine provides a clear explanation of <a href="https://www.inc.com/john-koetsier/how-blockchain-will-transform-business-in-3-to-5-years.html" target="_blank" rel="noopener">how the blockchain works</a>, which industries it’s likely to change and what’s standing in the way of the blockchain’s widespread adoption.There’s <a href="http://www.menshealth.com/sex-women/blind-dating-app" target="_blank" rel="noopener">a new dating app</a> for singles with little patience for protracted email exchanges.

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

Social Links: Instagram’s new tool to denote paid posts; the world’s 1st autonomous-vehicle public transportation system for the masses; the “COVFEFE Act” would seek to ensure Trump’s tweets are preserved

Instagram is now allowing a limited number of users to identify branded content with a “paid partnership” subhead instead of using hashtags like #ad and #sponso

Social Links: Instagram’s new tool to denote paid posts; the world’s 1st autonomous-vehicle public transportation system for the masses; the “COVFEFE Act” would seek to ensure Trump’s tweets are preserved

Twitter updated its online Privacy Policy to disclose that Twitter will be personalizing content and facilitating <a href="http://www.sociallyawareblog.com/2016/09/19/interest-based-advertising-disclosure-requirements-become-more-clear-and-potentially-more-burdensome/" target="_blank" rel="noopener">interest-based advertising</a> by <a href="https://www.forbes.com/sites/thomasbrewster/2017/05/18/twitter-privacy-update-called-creepy/#50029989464f" target="_blank" rel="noopener">sharing information about its users’ online activity</a> both on and off the microblogging site.Since YouTube resolved to <a href="https://blog.google/topics/ads/expanded-safeguards-for-advertisers/" target="_blank" rel="noopener">give brands greater control over the kind of content that their ads appear alongside</a>, many of the platform’s content creators and personalities have seen their ad revenue plummet, and they’re not sure whether it’s a result of <a href="http://www.hollywoodreporter.com/news/starbucks-pepsico-more-brands-pull-youtube-ads-growing-boycott-988721" target="_blank" rel="noopener">major companies continuing to avoid the platform</a>, new ad-buying methods, or YouTube algorithms flagging their content as inappropriate.A recently-released ABA ethics opinion states that, for communications with clients involving highly sensitive confidential client information, <a href="http://www.globallegalpost.com/big-stories/aba-warns-lawyers-updated-tech-needed-to-protect-client-info-43471852/" target="_blank" rel="noopener">lawyers may need to take extra steps beyond using unencrypted email to guard against cyberthreats</a>.An IBM application built on its Watson artificial intelligence platform and designed to help financial services companies monitor their outside counsel spend <a href="http://www.corpcounsel.com/id=1202786434937/IBM-Says-New-Watson-Tool-Could-Dramatically-Reduce-Outside-Counsel-Spend/" target="_blank" rel="noopener">reportedly saved one corporate customer close to $400 million a year in legal fees</a>.By advertising on quality news sites (and not just the big social media platforms where brands are currently spending the bulk of their online advertising dollars), corporate America can save not only critical watchdog journalism but also democracy itself, <a href="https://www.nytimes.com/2017/05/07/business/media/ad-buyers-have-say-in-survival-of-news.html?rref=collection%2Fsectioncollection%2Ftechnology&action=click&contentCollection=technology&region=stream&module=stream_unit&version=latest&contentPlacement=38&pgtype=sectionfront" target="_blank" rel="noopener">writes The New York Times’s Jim Rutenberg</a>,Has the <a href="https://www.wired.com/2017/05/blame-fyre-festival-fiasco-plague-celebrity-influencers/?mbid=social_twitter_onsiteshare%27" target="_blank" rel="noopener">influencer marketing model been jeopardized by the fiasco that was the Fyre Festival</a>, which celebrity influencers including Kendall Jenner and Bella Hadid allegedly endorsed “without any proof of concept” and, contrary to <a href="http://www.sociallyawareblog.com/2014/12/03/ftc-enforcement-action-confirms-that-ad-disclosure-obligations-extend-to-endorsements-made-in-social-media/" target="_blank" rel="noopener">FTC guidance</a>, allegedly promoted on social media <a href="http://www.salon.com/2017/05/04/fyre-festival-influencers-sued-for-social-media-promotion/" target="_blank" rel="noopener">without clarifying that their posts were paid endorsements</a>?A <a href="https://techcrunch.com/2017/05/15/sunrise-health/" target="_blank" rel="noopener">new mental health app</a> offers users support between professional therapy sessions by allowing them to anonymously message fellow members for support and by employing an artificial intelligence-based natural language processing system that can recognize and delete abusive messages and refer emergencies to a human moderator.Wendy’s awarded a year’s worth of its chicken nuggets to a 16-year-old whose tweet asking the restaurant chain for a 365-day supply of the fast food <a href="http://time.com/4772186/carter-wilkerson-most-retweeted-tweet-free-chicken-nuggets/" target="_blank" rel="noopener">went viral and broke Ellen DeGeneres’s record for the most re-tweeted post</a> on Twitter (3.42 million retweets and counting).

Social Links: Twitter modifies Privacy Policy; YouTube ad-policy changes lower some video creators’ payouts; teen beats Ellen DeGeneres’s re-tweet record

Twitter updated its online Privacy Policy to disclose that Twitter will be personalizing content and facilitating interest-based advertising by sharing informat

Social Links: Twitter modifies Privacy Policy; YouTube ad-policy changes lower some video creators’ payouts; teen beats Ellen DeGeneres’s re-tweet record